editione2.1.1
Updated September 12, 2022Many companies will give some leeway during negotiations, letting you indicate whether you prefer higher salary or higher equity.
Candidates with competing offers almost always have more leverage and get better offers.*
Salaries at startups are often a bit below what youβd get at an established company, since early on, cash is at a premium. For very early stage startups, risk is higher, offers can be more highly variable, and variation among companies will be greater, particularly when it comes to equity.
The dominant factors determining equity are what funding stage a company is at, and the role youβll play at the company. If no funding has been raised, large equity may be needed to get early team members to work for very little or for free. Once significant funding of an A round is in place, most people will take typical or moderately discounted salaries. Startups with seed funding lie somewhere in between.
βDefinitionβ When making a job offer, companies will often give a candidate a verbal offer first, to speed things along and facilitate the negotiation, following it with a written offer if it seems like the candidate and the company are close to agreement on the terms of the offer. The written offer takes the form of an βdocumentβoffer letter, which is just the summary sent to the candidate, typically with an expiration date and other details and paperwork.
Although companies often want you to sign right away to save time and effort, if youβre doing it thoughtfully youβll also be talking to the company (typically with a hiring manager, your future manager, or a recruiter, or some combination) multiple times before signing. This helps you negotiate details and gives you a chance to get to know the people you could be working with, the company, and the role, so that you can make the best decision for your personal situation.
When you are ready to accept the terms of the offer letter, you can go ahead and sign.